According to figures out from Australia this week, in 2017 over 55 percent of first home buyers sought help from their parents to fund their mortgage. This is a huge leap from 3.3. percent in 2010, and experts say that New Zealand is likely to be the same or even higher. One mortgage lender even suggests that 60-70 percent of New Zealand first home buyers had parental help, and for those under 30 years of age this figure jumped to 80-90 percent because of small KiwiSaver investments.

These statistics really highlights the difficulty for young people to get on the property ladder. When taking out a home loan to buy a house, it’s typically recommended that you borrow no more than 80% of the property’s value, which means having a 20% deposit. With average house values in Tauranga sitting at $700,000 a first home buyer would need $140,000 for a deposit. A cheaper home, for example $500,000, will still need a deposit of $100,000. Given these figures it is easy to understand why first home borrowers need to look to family to borrow their deposit.

The negative side to the story is that most of these loans are on a “pay it back when you can basis” and interest free, which can make it difficult for parents that are also moving onto the next stage of home ownership. It is also highlighting the gap between the haves and the have-not. Given home ownership is falling in main centres, and many more adults are renting, there is going to be an even wider gap between those who can afford to own property in New Zealand and those who will have to remain renting through their life.